8 October 2010

Kingdom's Post to go Public

Phnom Penh Post, 7 June 2010 by Nguon Sovan

Phnom Penh's central post office is shown on Sunday. A new sub-decree by the Council of Ministers has approved a plan to privatise the Kingdom's postal service to improve efficiency and and transparency ahead of a potential listing on Cambodia's forthcoming stock exchange.

CAMBODIA’s postal system will be become a public enterprise early next year in a bid to prepare for eventually listing on the domestic stock exchange, officials said Sunday.

Moving control from the Ministry of Posts and Telecommunications (MPTC) to operations at arm’s length will increase transparency and grow revenues, MPTC secretary of state Sarak Khann said.

“The government has targeted listing it on the upcoming stock market, so it will become a public enterprise to increase transparency in account standards and financial statements,” he said. “When it is transparent enough and generates sufficient revenue, it may be listed on the bourse.”

The Council of Ministers approved a draft sub-decree establishing Cambodia’s postal office as a public enterprise, according to a press release issued Friday.

Prepared by the MPTC, the sub-decree moves the postal system to a public enterprise to reform the management system, the release said. It added that the system would take advantage of modern information technology to track postal consignments, along with expanding service in remote areas.

Cambodia’s postal services were poorly developed, said Sarak Khann, who also leads a joint committee composed of MPTC and Ministry of Finance officials in evaluating the properties and capital of the system.

“We want to generate revenue from this sector like developed countries, not just around US$2 million a year it earns nowadays,” he said.

Some 20 local and foreign companies are licenced to do business in postal services, but only half are presently in operation, he said.

Transport and logistics firm TNT Express Worldwide Cambodia and Laos general manager Sjaak de Klein said they welcome increased openness in the postal system.

“We always welcome fair competition in a level playing field in a liberal postal market. We believe that the ultimate user benefits from these developments,” he said.

Council of Ministers spokesman Phay Siphan said the move to a private enterprise would improve financial responsibility as well as increase effectiveness and provide more autonomy in technology and finance.

“With the switch, we hope Cambodia’s post offices will provide better service and compete fairly with private enterprise,” he said.

Cambodia’s postal system presently includes 700 employees working at 80 post offices in 24 cities. Employees working for both the postal system and government ministries will have to choose one employer when the move to a public enterprise takes place, Sarak Khann said.

After becoming a public enterprise, he said, the post service’s board will be composed of representatives from the MPTC, the Ministry of Finance, the Council of Ministers, a government appointed CEO, and a staff representative.

The Cambodian Securities Exchange is scheduled to launch by the end of the year, and any qualified private firm or public enterprise is eligible to list, Cambodia Securities and Exchange Commission (SECC) director general Ming Bankosal said.

“All companies, not only Cambodia’s postal service, will be considered for listing if their financial soundness and corporate governance meet the criteria set by the SECC.”

A firm interested in listing on the SECC must be transparent in its accounting and governance, according to the stock market’s rules. To issue an initial public offering (IPO), it is required to have minimum capital of 10 billion riels, or $2.35 million, an annual profit of 1.5 billion riels, or $352,941, and net profits for three years totaling 3 billion riel, or $705,882.